An interesting article was recently posted on propertycasualty360.com regarding the needed evolution of the workers’ compensation system. The author, Mark Walls, offered many opportunities for the system to evolve for enhanced quality of care and cost containment. I highly recommend “10 Ways in Which Workers’ Compensation Needs to Evolve,” online at propertycasualty360.com/2016/05/16/10-ways-in-which-workers-compensation-needs-to-evo.
Among the issues discussed in the article are the pitfalls of a medical delivery model based on discounts and conflict. After 20 years in the occupational medicine environment, I couldn’t agree more. Workers’ compensation unnecessarily creates an environment in which workers and plaintiff attorneys are perceived to be fighting the employer and evil insurance companies. As an occupational medical service working with more than 3,800 employers and caring for thousands of injured workers every year, I can tell you that—for the employee and employer—this perception is more myth than reality.
Most injured workers are truly injured and want nothing more than to heal, recover and return to productive work. Most employers want nothing less than to see an injured employee get the best care possible.
I do not mention attorneys and insurance companies as part of the myth. I believe the employer and employee are often unwittingly caught as pawns in this conflict-and-discount game for those seeking maximum gains. It is an undeniable truth that the cornerstone of the legal system is conflict. If attorneys are not making money attempting to resolve a conflict between parties in litigation, they are writing or reviewing the contracts that cause or prevent them. Our insurance industry is driven by charging premiums for promised coverage, and then doing everything possible to minimize exposure to that promised coverage. The insurance carrier—by necessity and dictates of law—has a fiduciary duty to its shareholders first, not its customers.
That may sound cynical. However, workers’ compensation accounts for one-sixth of all healthcare expenditures. Insurers attempt to limit exposure (and hamper care) with independent medical examinations, utilization review, impairment ratings and non-medical monetary settlements, claiming to best represent the concerns of the employer. Their one reasonable means of cost control (realistically, cost-shifting to other insurers) is legally denying benefits based on failed post-accident drug and alcohol screening.
The newest novelties in cost containment are “networks” and discount clearing houses. These are the intermediaries that perpetuate a myth of cost savings promoted by the insurers. They promise savings to employers by negotiating discounted or capped rates per billable unit/visit from medical providers. And they will negotiate a discounted rate to themselves from the insurer.
Evidence of quality medical care is rarely, if ever, a consideration for these brokers. One can argue that quality is actually discouraged by these networks, because quality is often more efficient and less expensive—costing them money as well. In the end, very little gets passed on to the employer, because administrative fees and higher billing often drive the employer’s exposure above the cost of going “out of network” for more efficient, less costly care.
Workers’ compensation (and all of healthcare) needs a foundation built on expedited treatment, efficiency and quality of outcomes. The Illinois legislature has promised reforms for eons, with no more substantive results than progressively reducing a fee schedule and promoting an environment of confrontation and conflict. It is patently obvious why workers’ compensation attorneys love practicing in this state. iBi